Royal Dutch Shell plc (Shell) is a holding company, which owns, directly or indirectly, investments in numerous companies constituting the group. Shell is engaged globally in the principal activities of oil and natural gas industry. The Company operates in five business segments: exploration and production, gas and power, oil sands, oil products, and chemicals. The exploration and production business searches for and recovers oil and natural gas globally. The gas and power business liquefies natural gas and transports it to customers. Its gas to liquids (GTL) process turns natural gas into cleaner-burning synthetic fuel and other products. The oil sands business extracts bitumen and converts it to synthetic crude oils that can be turned into a range of products. The oil products business makes moves and sells a range of petroleum-based products globally for domestic, industrial and transport use. The chemicals business produces petrochemicals for the industrial customers.
Business Segments/Products
The main business divisions of the company include exploration and production, gas and power, oil sands, oil products, and chemicals. Shell offers a wide range of products, including liquefied natural gas (LNG), electricity, gasoline, low-sulphur diesel, lead replacement fuel, marine lubricants, chemicals (such as ethylene, propylene, aromatic chemicals, detergent alcohols, and fuel additives), and other fuels.
The operations of the exploration and production segment (also known as upstream activities) are spread over 38 countries. These operations include searching for oil and gas reserves, drilling wells, and extracting crude oil and natural gas to sell on international markets or use for refining. This segment is supported by a research and development center that is responsible for improving the cost efficiency and performance of the company’s exploration and production activities. Shell's oil sands business can be included with exploration and production because the end goal of both are the same: get crude oil. Together, these segments made up 54% of Shell's CCS earnings, totaling $3.04 billion during the second half of 2009. Earnings were impacted by lower oil and gas prices and higher exploration expenses. In January 2010, Royal Dutch Shell sold its remaining interest in the London Gateway project to DP World for $220 million. The London Gateway project consists of redeveloping a former oil refinery on the River Thames at Thurrock and constructing a new deep water port.
The gas and power segment also forms a part of its upstream business. This segment is responsible for transporting natural gas, developing power plants, and marketing gas and electricity on a worldwide scale. The gas and power produced by this segment is primarily used for consumption by industries, business units as well as residential and government consumers. This segment made up 22% of Shell's CCS earnings, totaling $1.2 billion for the second half of 2009.
The company’s downstream oil products business includes the refining and marketing of petroleum products including fuels, lubricants, and petrochemicals. Shell has ownership interests in 46 refineries around the world and manufactures oil and petroleum products, such as gasoline, diesel, heating oil, aviation fuel, heavy heating oil, lubricant, and bitumen. This segment accounted for 13% of the company's CCS earnings, totaling $745 million in the second half of 2009.
Shell sells its products to both retail as well as business customers. Shell has 45,000 retail gas stations across the world operating under a single brand name. Its products include low-sulphur diesel, lead replacement fuel, liquefied petroleum gas (LPG), and differentiated fuels (differentiated fuels are tailor-made to meet growing customer needs for improved engine and environmental performance) including Shell Pura, Optimax, V-Power, V-Power Racing, and V-Power Diesel. It has convenience stores at more than 10,000 locations. A range of products including fuels, lubricants, and specialty products are sold to a wide range of business customers through five sub-segments of the company – Shell Aviation, Shell Marine Products, Shell Gas LPG, and Commercial Fuels and Lubricants.
The chemicals segment is part of the company’s downstream business and is mainly involved in producing and marketing petrochemicals. The segment had a loss of $92 million due to impairment charges across the second half of 2009. Last Updated (Tuesday, 19 January 2010 15:33)
Nestle SA is a company engaged in the nutrition, health and wellness sectors. It is the holding company of the Nestle Group, which comprises subsidiaries, associated companies and joint ventures throughout the world. It has such business units as Food and Beverage, Nestle Waters and Nestle Nutrition. It is also active in the pharmaceutical sector. It divides its products into nine categories: Prepared dishes and cooking aids, Beverages, Confectionery, Ice cream, Water, PetCare, Milk products, Nutrition and Pharma. It has numerous subsidiaries engaged in various areas of activity, including Alcon Ophthalmika GmbH (Austria), Alcon Bulgaria EOOD (Bulgaria) and Galderma Laboratorium GmbH (Germany) for pharmaceuticals; Novartis Nutrition GmbH (Austria) and Hjem-IS A/S (Denmark) for food and beverages, and Galderma International SAS (France) and Galderma Laboratorium GmbH (Germany) for health and beauty activities. In July 2008, Novartis AG acquired a 25% stake in Alcon, Inc. from Nestle SA.
Business Segments
Beverages
Beverages comprised 26% of Nestle's 2008 revenues, making it the second-biggest segment after Milk Products, Nutritional and Ice Cream. Nestle owns several international beverage brands including Nescafe, Nesquick, Nestea, and Nestle Waters, each of which generated more than 1 billion CHF in 2007. With more than 400 factories around the world, Nestle is able to formulate each product to local tastes; "Nescafe" in Switzerland has a different recipe to the same product sold in the USA. Nestle's strong brand recognition helps them compete with other brands such as Maxwell House, Lipton, and Evian as well as various store brands.
Milk Products, Nutritional, and Ice Cream
Milk Products, Nutritional, and Ice Cream was Nestle's largest segment in 2008 with 28% of the companies total sales. This division's brands include Carnation, Coffee Mate, Dreyer's, and Edy's, each of which totaled more than 1 billion CHF in 2007 sales. Nestle's milk and ice cream brands compete with products such as Breyer Ice cream and store brands. Their nutritional products include Gerber Brand baby food and Nestle brand yogurts. Nestle's nutritional products compete against brands such as Dannon Yogurt and store brands.
Prepared Dishes and Cooking Aides
Nestle's Prepared Dishes and Cooking Aides segment, which contributed 17% of the company's 2008 sales, consists mostly of products, like microwave lasagna, that are designed to be ready to eat very quickly. Nestle owns brands such as Stouffer's, Lean Cuisine, Hot Pockets, and Maggi, which each totaled more than 1 billion CHF in 2007 sales. Nestle has increased the nutritional value of its prepared dishes in order to compete with products such as DiGiorno, Bertoli, and Kraft Macaroni and Cheese.
Confectionery
Nestle's Confectionery segment comprised 11% of their total 2008 sales. Nestle's confectionery brands include Kit-Kat and Nestle Chocolate, each of which generated more than 1 billion CHF in 2007 sales. The Nestle Chocolate brand produces famous products such as Baby Ruth and Nestle Crunch. Nestle's confectionery products compete with chocolates and candies from Hershey Foods (HSY) and Cadbury Schweppes (CSG) and snacks from manufacturers such as Kraft Foods (KFT), as well as various store brands.
Pet Care
Nestle's Pet Care group contributed 11% of the company's total 2008 Sales. Nestle owns several pet care brands that produced more than 1 billion CHF in 2007 such as Purina, Dog Chow, and Friskies. Nestle's pet care products compete against brands such as Iam's and store brands.
Pharmaceutical Products
Nestle's Pharmaceutical Products division was responsible for 7% of the company's 2008 sales. This segment consists of pharmaceutical and cosmetics brands. Nestle owns about 77% of ALCON (ACL) and 30% of L'oreal (LRLCY). Nestle also participates in two joint ventures with L'oreal (LRLCY): Galderma and Laboratoires innéov. Galderma produces the topical acne medication Differin and Laboratoires innéov produces several cosmetics-related nutritional supplements. Last Updated (Tuesday, 19 January 2010 15:22)
United Parcel Service, Inc. (UPS) is a package delivery company. The Company delivers packages each business day for 1.8 million shipping customers to 6.1 million consignees in over 200 countries and territories. During the year ended December 31, 2008, UPS delivered an average of 15.5 million pieces per day worldwide, or a total of 3.92 billion packages. Its primary business is the time-definite delivery of packages and documents worldwide. UPS operates in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. U.S. Domestic Package operations include the time-definite delivery of letters, documents, and packages throughout the United States. International Package operations include delivery to more than 200 countries and territories worldwide. Supply Chain & Freight includes its forwarding and logistics operations, UPS Freight, and other related business units.
Business Overview
UPS was founded in 1907 by 19 year-old Jim Casey as the American Messenger Company, a private messenger service employing local teenagers in Seattle. In 1913, the company moved from messages to packages, began using automobiles, and started making deliveries for retailers.
Realizing that service for retailers was limited, UPS moved into the parcel shipping business shortly thereafter. Despite legal restrictions that it faced initially, UPS offered parcel delivery services between the 48 contiguous United States by 1975. In the 1980s, UPS began flying packages on its own airplanes to avoid the risk associated with relying on commercial airlines. UPS is now the 9th largest airline in the world.
In the 1990s, UPS launched online package tracking, the UPS Logistics Group, and UPS Capital, which offers customers financing for the supply chain purchases that they ship via UPS. These steps marked the beginning of UPS’s first efforts to expand its services beyond shipping, efforts that remain key to UPS’s growth strategy for the coming years. Today, UPS offers business customers supply-chain management, financing, and the option to incorporate UPS shipment data into their own IT systems. For individuals, more than 6,000 franchisee-owned UPS Store and Mail Boxes Etc. locations across the U.S. offer private mail box rentals, packaging supplies for purchase, and convenient drop-off locations for UPS shipments. These services are available in 24 countries and include about 150,000 access points.
Company structure
UPS's primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended their service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services. UPS reports their operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.
U.S. Domestic Package
U.S. Domestic Package operations include the time-definite delivery of letters, documents, and packages throughout the United States.
International Package
International Package operations include delivery to more than 200 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or distribution outside the United States.
Supply Chain & Freight
Supply Chain & Freight includes UPS's forwarding and contract logistics operations, UPS Freight, and other related business units. UPS's forwarding and logistics business provides services in more than 175 countries and territories worldwide, and includes worldwide supply chain design, execution and management, freight forwarding and distribution, customs brokerage, mail and consulting services. UPS Freight offers a variety of less than truckload (“LTL”) and truckload (“TL”) services to customers in North America. Other business units within this segment include Mail Boxes Etc. (the franchisor of Mail Boxes Etc. and The UPS Store) and UPS Capital. Last Updated (Tuesday, 19 January 2010 15:13)
McDonald’s Corporation franchises and operates McDonald’s restaurants in the food service industry. These restaurants serve a varied, limited, value-priced menu in more than 100 countries globally. The restaurants are operated either by the Company or by franchisees, including franchisees under franchise arrangements, and foreign-affiliated markets and developmental licensees under license agreements. During the year ended December 31, 2007, the Company sold its businesses in Brazil, Argentina, Mexico, Puerto
Business Overview
Business Model
McDonald's makes money by operating its own restaurants and franchising to third parties. Of its 32,278 restaurants around the world as of September 30, 2009, 25,975 (80%) were franchises and 6,303 (20%) were company-operated. Franchises provide the initial capital required to build the restaurant and maintain it through reinvestment reinvestment, whereas direct restaurant operation is more capital-intensive relative to franchising and results in lower restaurant margins as a percent of revenues.
McDonald’s revenues come from sales by its company-operated restaurants as well as fees from its franchise restaurants. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales along with minimum rent payments, and initial fees. Revenues from restaurants licensed to affiliates and developmental licensees include royalties based on a percent of sales, and generally include initial fees.
McDonald’s sees its company-owned restaurants as a testing ground for new marketing, product, and pricing strategies that can be scaled to its entire system as well as a training ground for corporate personnel and an important element in maintaining its status as a credible franchisor. In the last few years, however, McDonald’s has sought to shift toward franchises. In 2007, it sold its businesses in Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other Latin American/Caribbean countries to one franchisee. This has resulted in greater cash flow (which increased by 12% in 2007), reduced spending on operations, and less corporate exposure to rising commodities prices.
Business Strategies
McDonald’s has pursued two strategies since 2003. To keep up with rapidly changing consumer preferences, demographics, and spending patterns, McDonald's has introduced new items (Premium Chicken sandwiches and the Angus Beef Burger) and campaigns to create more healthy foods (Premium Salads). The strategy reflects the philosophy that novelty, as opposed to loyalty to traditional products, is the key determinant of sales in the fast food industry.
McDonald’s has also focused on increasing sales at existing restaurants instead of opening new ones. To do so, McDonald's has remodeled many restaurants, kept stores open longer, and increased menu options. Nevertheless, new McDonald’s restaurants are still opening around the world at a rapid rate - the company plans to open about 1,000 units in 2008, and continues to grow its restaurant base by 1-2% each year. Rico, Venezuela and 13 other countries in Latin America and the Caribbean, which totaled 1,571 restaurants, to a developmental licensee organization. The Company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers. Last Updated (Tuesday, 19 January 2010 15:03)
Johnson & Johnson is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. Johnson & Johnson has more than 250 operating companies. The Company operates in three segments. The Consumer segment includes a range of products used in the baby care, skin care, oral care, wound care and women’s healthcare fields, as well as nutritional and over-the-counter pharmaceutical products. The Pharmaceutical segment includes products in the therapeutic areas, such as anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, urology and virology. The Medical Devices and Diagnostics segment includes a range of products distributed to wholesalers, hospitals and retailers. In July 2009, Johnson & Johnson completed the acquisition of Cougar Biotechnology, Inc. with approximately 95.9% interest in Cougar Biotechnology's outstanding common stock.
Business Overview
Johnson & Johnson has interests in a broad spectrum of the health care market, and takes a decentralized approach to managing its 250 operating companies and franchises. In the company's continuing effort to diversify its business and increase profits, Johnson & Johnson is constantly acquiring new companies, including 8 in the last year alone. In 2007, worldwide sales totaled $61.1 billion, making Johnson & Johnson the second largest manufacturer of health care products, behind Pfizer.
Johnson & Johnson's 2009 second quarter net income fell by 3.5% to $3.21 billion compared to $3.33 billion a year ago. Quarterly sales fell by 7.4 percent to $15.24 billion, down from $16.45 billion the year before but above expectations of $15 billion. The decline is partially attributable to two major patent expiries (Risperdal and Topamax), as well as a decline 4.5% in consumer products revenue.
JNJ's 2009 struggle continued in Q3, as sales ($15.1 billion) decreased 5.3% from Q3 2008. JNJ's poor domestic performance (8.1% sales decline) was the reason for the sales decline, as the firm is still trying to handle "tough economic conditions". JNJ is optimistic for the rest of it's fiscal year, however, as it made two acquisitions and had four new drugs become FDA approved. Last Updated (Tuesday, 19 January 2010 14:56)
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